I've been experimenting right now with automatic trading for foreign exchange it's doing decently up about 3% on the week. It trades off a 15 min chart with only a 225MVA and off of stochastic.

Clearly I'm in the wrong business haha trading volatility is the way to go. Ive been reading a little up on it as i might pursue my MFE, any advice good sir?

My only advice to you if you're interested in vol is to first understand yourself well. Vol is, obviously, the most volatile thing you can play in the market (next to betting on biotech earnings, lmao). The psychology in playing vol will rip some people apart (when I first started, sleep was very bad). Case in point, my worst loss was -$65,000 on an overnight position. That's one day. The swings in vol are huge. It took me a while before I could properly evaluate the risk involved.

Understand the term structure, contango, backwardation, roll yield, etc. Know it cold that you could teach somebody it. Know it so well you can listen to news and evaluate if the fear is overdone or not based on looking at the term structure. Ex. Fiscal cliff drove VIX up 40% in 5 days. I shorted that into the new year on the 28th of dec knowing the term structure didn't support the move. Next day was the single biggest drop in vol on record. But it would have sucked for everyone shorting into the new year. Huge losses over one day.

Quote:

Originally Posted by 335i1

Whats Vix

Don't touch volatility.

Quote:

Originally Posted by slamako

I realize that I can't do my day job when trading vol.
I made a noob mistake by setting up a sell order (when I wanted a stop order) when I was away from my terminal. It ended up being the right trade for me as VXX took a dump yesterday (and today)

Once we retest new highs and enter the dumb money, we will start our corrective phase and vol will be back on.

Thanks again for all those that contribute. This thread has made me a better trader.

Oh boy that made me cringe. Think about how bad it could've gotten if your order was the other way around. Yikes.

Anyways, I discussed above the prospect or XIV hitting $22.00 if the market broke 1510. It did, but then stopped at 1520 and got rejected there. $21.00 may be all XIV wrote. We will have to see what is the outcome of the 1520 rejection tomorrow. I've liquidated my XIV and holding VXX now overnight @ $23.24. (Held it at 23.01 briefly but got stopped out when VXX dropped to $22.85. Argh!